Sony to acquire Gracenote for $260 million

Apple Online StoreSony Corporation of America announced today that it has signed a merger agreement with Gracenote, Inc. Sony will pay approximately $260 million plus other contingent consideration.

“Gracenote is a global leader in technology and services for digital media identification, enrichment, and recommendation, and these capabilities will be essential to the next wave of innovation in content, services, and consumer electronics,” said Tim Schaaff, SCA Senior Vice President, Software, in the press release. “Sony sees tremendous growth potential in developing Gracenote as a separately run business unit, and by broadly embracing Gracenote’s platforms, Sony expects to significantly enhance and accelerate its own digital content, service, and device initiatives.”

“We are very pleased to join Sony as its strategic vision is very much in line with our own,” said Craig Palmer, Gracenote CEO, in the press release. “Having a closer connection with the content and digital services community will accelerate adoption of Gracenote technologies, and the relationship will also give us the resources necessary to rapidly expand development of next generation products for the industry.”

Gracenote’s existing business will continue to operate separately. As a wholly owned Sony subsidiary, Gracenote will continue to develop new technologies in existing as well as new areas of operation. The senior management team will remain with the company.

Sony and Gracenote anticipate that the transaction will close in late May, subject to certain regulatory and other approvals.

Gracenote is a global leader in embedded technology, enriched content, and data services for digital entertainment solutions within the Internet, consumer electronics, mobile, and automotive markets. Formerly known as CDDB, Gracenote delivers a substantially improved consumer experience in digital media devices and applications, plus media monitoring and other data services to the recording industry, making it an integral part of the digital media economy. Gracenote powers leading services including Apple iTunes, Yahoo! Music Jukebox, Winamp; home and automotive products from Alpine, Panasonic, Philips and Sony; and mobile music applications from Samsung, Sony Ericsson, KDDI (Japan), KTF (Korea), Musiwave (Europe), and others. Gracenote is headquartered in Emeryville, California.

Sony Corporation of America, based in New York, NY, is a U.S. subsidiary of Sony Corporation, headquartered in Tokyo. Sony is a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets. Its motion picture, television, computer entertainment, music and online businesses make Sony one of the most comprehensive entertainment companies in the world. Sony’s principal U.S. businesses include Sony Electronics Inc., Sony Pictures Entertainment Inc., Sony Computer Entertainment America Inc., and a 50% interest in Sony BMG Music Entertainment, one of the largest recorded music companies in the world. Sony recorded consolidated annual sales of approximately $70.3 billion for the fiscal year ended March 31, 2007, and it employs 163,000 people worldwide. Sony’s consolidated sales in the U.S. for the fiscal year ended March 31, 2007 were $18.9 billion.

Source: Sony Corporation of America

32 Comments

  1. It will be interesting to see if Sony ties Gracenote stuff in with the PS3, as a PS3 owner I hope they do, that would really add value to the PS3 as a media center for movies, music, and games.

    Yes, that would be in competition with the AppleTV, but it’d still be worth it.

  2. Doesnt iTunes access grace note whenever you import music from a cd into itunes so it can get a list of the tracks on the album?

    I wonder how this is going to effect iTunes??

    Maybe Sony will make the grace note software incompatible with itunes to fuck Apple.

    Ummm…

  3. “Gracenote is a global leader in embedded technology, enriched content, and data services for digital entertainment solutions within the Internet, consumer electronics, mobile, and automotive markets.”

    If one was wont to read between the lines, IMHO, there is a hint of the smell of DRM in all this.

    Which I wouldn’t normal do except for Sony’s past behavior. Sony is clearly one of those companies that plans to hang on to DRM until it is pried from their cold, dead hands.

  4. @call me paranoid, but…

    I read the same thing. I associate Sony more with DRM nowadays than anything else. Sony’s past attempts at DRM (Extended Copy Protection (XCP), MediaMax CD-3, and SecuROM) were enough for me to stop purchasing Sony products all together.

    While I respect copyright laws, I do not respect companies who think that they have the right to install unsecured and hidden software onto peoples systems without their permission. I wish more people would take a stance and not buy any Sony products.

  5. If Sony takes control of Gracenote and iTunes contacts Gracenote every time a CD in imported, they will have a record of all the CDs that have been imported to every iTunes account. What a bother. I wonder if their database will be able to identify each individual iTunes account or account holder? Big Brother grows stronger.

  6. @ me

    It’s to remind you how pathetic the Zen is by comparison.

    Is the Zen fully internet capable, with a real, live web browser?

    Really?

    Can the Zen match the iPod’s near-flawless multi-touch interface?

    Really?

    I mean… I could go on and on and on, but I suggest visiting

    http://www.apple.com/ipodtouch/

    before stating the Zen looks anything but 10 years out of date.

  7. Scariness! Now the biggest pusher of DRM now owns the company that can track which songs I listen to in iTunes? This is horrible. I hope Apple switches to an alternative quickly.

    Apple and other Sony competitors must love the fact that Sony can now track their competitors’ users…NOT.

  8. I would have thought that Son wouldnt have been allowed to buy Grace note.

    Seriously though, this is one deal Steve Jobs missed and should have done.

    Apple should have bought Grace note.

    I really dont like the idea at all that Sony owns the database and technology now that every music software contacts.

  9. “Maybe Sony will make the grace note software incompatible with itunes to fuck Apple.”

    It’s pretty hard to see why they’d put the effort in. If they wanted to cause problems for Apple, they’d presumably just refuse to grant them a licence to connect to their servers and use their service.

    But why would they do that? I don’t know what Apple pays for the licence, but I don’t suppose it’s a small amount. Besides, Apple would, I imagine, simply strike a deal with someone else — there are other companies offering similar services:

    http://en.wikipedia.org/wiki/List_of_online_music_databases

    Take Microsoft Office for Mac as a comparison. The Borg could have dropped it just to “fuck Apple” … but, on the other hand, it’s a good money spinner for them. Sony, like Microsoft, might be a pack of bastards, but they’re not suicide bombers. Sometimes it’s better to do business with a competitor than to damage yourself while trying to damage them.

  10. so you go to rip a sony music cd into iTunes it contacts gracenote, it then sends a message back saying tracklisting denied.

    It then tells you to toto the Sony music download store to buy the album there.

    Great news eh?

    Welcome to the future of ripping purchased CDs into itunes!

    If you think Sony isn’t going to use this technology to cripple iTunes then you are VERY nieve!

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